Pa. fish company has thrived off the eel market

PHILADELPHIA — Barry Kratchman’s experience more than 40 years ago — as a teenager, he watched in “horror” as an eel’s head and body each continued to wriggle well after being separated — might seem gross.

It was gross.

But it also proved something important, he insists now: that his friend — the one behind the beheading, the one who wanted to experience what eel tasted like when filleted, breaded, and baked — would make a tremendous business partner because he wasn’t afraid to try new things.

And that, Kratchman said, is what has been borne out since 2000, when Mitchell Feigenbaum, his former classmate at Philadelphia’s Central High School, bought Kratchman’s father’s share in the family eel business.

Since then, they have been on a fishing expedition, you might say, to stay afloat in a small, highly competitive business niche with no U.S. market.

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Eel isn’t exactly a dietary staple among Americans.

“They think of eels as snakes,” Kratchman said.

Delaware Valley Fish Co.’s 40-year history is one of triumphs and agonies. It involves acquisitions and an accidental death, bankruptcy, and broadening markets, thanks to the middle-class boom in Asia. There are worries over regulatory restrictions, and the shrinking ranks of fishermen, and preparations for a next generation of operators.

It began in 1972, when Kratchman’s grandfather David and father, Sheldon, opened the company in a 4,000-square-foot warehouse at 12th and Bainbridge Streets in South Philadelphia.

David Kratchman knew fish as a truck driver for 25 years with Superior Fish Co.

Sheldon Kratchman had owned a couple of fruit stores in the city. Newly divorced, “I wanted to start afresh,” he said last week, recalling his reasons for wading into the eel business.

At the time, there was just one market for eel: Europe. Sheldon Kratchman went there and secured business, he said, by paying “a nickel a pound more” for eels and selling them for less than the competition.

Back in Philadelphia, people “would shake their heads” when they heard what line he was in.

“We had more recognition in Europe than we had in Philly,” Sheldon Kratchman said.

Barry was just 9 when he started learning the family business, chasing the eels that flopped off the table during the sizing, or grading, process.

“I used to walk around with a little net and pick the eels off the floor,” said the president of the company, now 49.

Joining it wasn’t his initial career plan. While at Pennsylvania State University in the mid-1980s, he majored in hotel/restaurant management.

By the time he graduated, his father needed help. He had been running Delaware Valley Fish alone since David Kratchman died in 1982 after an accident driving one of the company’s trucks.

Sheldon Kratchman was working through a bankruptcy he attributed to wrongfully thinking he knew something about raising eels. A $600,000 investment in an 80-acre Florida property during a time of high interest rates quickly led to disaster. Eventually, Sheldon Kratchman said, he paid everyone he owed and returned to focusing on exports.

When Barry Kratchman became his father’s partner in 1990, he had one primary goal: product expansion. They butted heads but agreed to add tilapia, striped bass, and lobster.

They also agreed the South Philadelphia plant was too small. They moved Delaware Valley Fish to its current headquarters, a 15,000-square-foot warehouse in Norristown served by a 300-foot-deep well, where the water is plentiful and 56 degrees. It’s an ideal temperature for maintaining the eels, trucked in from fisheries from Florida to Canada, before they are packed live for export.

In a season, that’s 250,000 eels - or 50,000 pounds of fish ranging in length from 12 inches to 30 inches — slithering in the company’s 23 1,000-gallon tanks. Gravity-based systems have replaced the labor-intensive, less-efficient way of moving and sorting eels at the Philadelphia site. Then, the company had 20 full-time employees; now, it’s 15, not counting the 200 to 300 fishermen it buys from.

In 2000, Feigenbaum bought into the business. From that clumsy eel dissection of his youth, he went on to work weekends at Delaware Valley Fish, then represent it as a lawyer with Mesirov Gelman, brokering the acquisition of a major Canadian competitor.

Sheldon Kratchman welcomed Feigenbaum’s ownership involvement on the condition that he agree to move to Canada to run the new operation.

“To this day, people question why I would ever do such a crazy thing,” Feigenbaum said of his departure from the practice of law to live “in the middle of nowhere. . . . I never had any regrets.”

Another game-changer came 10 years ago: exporting elvers, or baby eels, a species no bigger than three inches but with huge business potential for Delaware Valley Fish because of plentiful supply and high demand among fish farms and consumers throughout Asia. Their value today is 10 to 15 times more than it was a decade ago, Barry Kratchman said, versus the 30 percent to 40 percent appreciation of adult eel.

In 2006, the company again expanded its portfolio, establishing Little Shemogue Oyster Co. on a secluded cold-water bay in New Brunswick, Canada. Its oysters are on menus throughout the United States.

There’s one part of this fish story Barry Kratchman — also known on the local restaurant scene as president and CEO of the Classic Cake bakery company — is unwilling to divulge: the company’s revenue.